Insight
Hamed: Early-stage venture capitalists are effectively just merchant bankers
“The term that most people in venture capital wouldn't want me to use Is that we're sort of merchant bankers. We run around, we invest some of our own capital. And then our job is to tell the rest of the market that they should invest at a higher price. And so …”
Prediction Not checkable as stated
Hamed predicts Instagram risks obsolescence due to poor creator monetization
“And we think Instagram is really at risk of going away because the creators on Instagram aren't making enough money to actually make good content.”
Opinion
Hamed: Bitcoin has the worst tech in index but unbeatable network effects
“Bitcoin's probably the worst technology of the ones in the index. It's probably slower, more expensive, but it's got stain power, and people trust it, and it's hit some level of network effect that would be very, very difficult to overcome.”
Insight
Hamed: Venture valuation is broken by pricing all equity at senior rates
“The term valuation is broken, right? We basically take, let's take the price of the most senior security and ascribe that to the price of every other security, regardless of the structure and call the cumulative number, the value. Which is like totally bullshi…”
Insight
Hamed: Venture investing means turning contrarian ideas into consensus within 12 months
“It's sort of a contrarian business, but what it really is, it's a contrarian business that you're really working hard to turn into a consensus business. If you invest in a company and 12 months later is still contrarian, the company's gonna run out of money un…”
Disclosure
Hamed: Crossbeam allocates more capital to initial rounds, less to follow-ons
“We actually have the point of view that during a market like this, we're actually loading up more of our checks into the initial round and then doing less into the follow on round, especially for our best companies.”
Opinion
Hamed: Most fintech startups are actually bad businesses without enduring moats
“One of the most wonderful things about fintech companies is most of them are pretty bad businesses. And we spent a lot of time trying to actually discern which fintech companies are good companies to begin with and which fintech companies are just never going …”
Insight
Hamed: $10M to $20M EBITDA is the worst zone for Amazon sellers
“I would actually argue that right now in the Amazon ecosystem, the worst place to be is between 10 and twenty million dollar EBITDA. Because at 10 and twenty million of EBITDA, it's too big for a family office or a high net worth individual or a group of angel…”
Opinion
Hamed: Profitable Amazon rollups growing 50% QoQ trade at historically low multiples
“We've never seen a company that's profitable and growing its EBITDA 50% quarter for quarter, raise at such low multiples and have so much trouble raising because so many people say, ah, just we haven't figured out the market yet.”
Insight
Hamed: Venture returns from unexpected pivots or unpredicted reasons are low quality
“We have certain companies in our portfolio that have done tremendously well for reasons that we didn't predict. Those are not high quality returns.”
Insight
Hamed: Seed VCs seek personal fame because fund marketing economics are broken
“Seed investors often have less management fees than series A investors, but they're trying to play a more expensive marketing game. And so you have a business model where the marketing part is just totally broken. And so you have all these growth hacky things …”
Prediction Not checkable as stated
Hamed in 2018: Inexperienced crypto managers will face redemption runs
“Eventually that is going to matter, and you're going to have a lot of managers who have never experienced something like that, and they're going to throw up gates, either prematurely or too late, because that's sort of their secret weapon.”
Prediction Not checkable as stated
Hamed: Top VC firms will win deals by accepting lower net returns
“But I do think in 10 to 15 to 20 years, that's where the market will evolve. And if you're one of these firms with a really established LP base, you've produced strong returns consistently for a long time, you will be able to produce less good returns than oth…”
Insight
Hamed: Co-investing with top-tier VCs suffers from negative selection bias
“You know, there's negative selection bias in any of those deals that you can actually get into unless you can really explain it. So I think that as an LP, what you should really be doing is take that as a indicator of their network and who they know and who th…”
Opinion
Hamed in 2018: The SoftBank Vision Fund has replaced the IPO
“And now we have the soft bank vision fund, which is like the replacement of the IPO, right? Like the goal used to be, I want to IPO my company. And now they're like, the goal is I want Masasan to like, give me more money than anyone could ever imagine.”
Insight
Hamed: Venture capital is a sales asset class, not an investing one
“Venture capital often becomes more of a sales and business development asset class than it does an investing asset class. It's very rare that in venture, you're crunching a bunch of data, whereas in credit, you're just relying on the data.”
Prediction Not checkable as stated
Hamed predicts economic value will shift from platforms to individual creators
“So those media companies have less leverage on the people on them. So the value will start to shift to the people on those platforms as opposed to the platform itself.”
Insight
Hamed: Strategic vision is irrelevant compared to execution in year one
“In the beginning, the company needs to make something and sell it, and there's like not a ton of strategic vision in those first 365 days.”
Opinion
Hamed: Defining funding stages strictly by revenue run rates is a mistake
“A lot of venture capitalists and investors generally make the mistake of thinking, well, you know, a deal that's doing a few 100,000 annualized revenue is a seed deal. A company that hits the million dollar annualized revenue run rate is a series A deal. Five …”
Insight
Hamed: YouTube beats Instagram by sharing programmatic ad revenue with creators
“YouTube content is good because YouTubers make money. They use that money to reinvest in production. And you have people like Mr. Beast producing incredible stuff. Instagram is so hard to make money on because Instagram doesn't roll out programmatic ads at sca…”
Prediction Not checkable as stated
Hamed predicts user-generated titles are the future of video game publishing
“I bet you that the future of game publishing is not spending years and years coming up with a game and trying to distribute it in metal CDs, metal boxes at people's homes. It's these user-generated games.”
Assertion Not checkable as stated
Hamed: Nine Crossbeam Fund I startups exceed $20M revenue and are profitable
“In the first fund we did at AcrossBeam, nine of the 25 companies we backed are over twenty million dollars of revenue run rate and profitable, which is just insane for venture capital, but it's because these financings often allow these companies to be super e…”
Insight
Hamed: Amazon rollups can secure 85% to 95% debt advance rates
“In Amazon, as mentioned, it's the opposite. You can finance them at 90, 95, 85% advance rates. One, because you don't care about the alignment anymore. You're their whole facility. You're the only financier. So if they screw up that facility, they're toast. Th…”
Insight
Hamed: Technology is a commodity; go-to-market is the hardest part
“Because whereas a few years ago, the hardest part of building a technology company was actually building the technology. Now, for most of these companies, it's just getting to market. The technology, in many ways, is just a commodity. And so in underwriting wh…”
